Hovnanian's Revenue Falls 20%, A Worse Loss Than Expected

By BLOOMBERG NEWS

Published: June 8, 2011

Hovnanian Enterprises, the home builder, reported a wider quarterly loss on Tuesday as revenue fell 20 percent amid slumping demand for new houses.

The net loss was $72.7 million, or 69 cents a share, compared with a loss of $28.6 million, or 36 cents, a year earlier, the company said. The result was worse than the loss of 55 cents a share expected by analysts.

Hovnanian, which specializes in building single-family homes, is buying land at distressed prices in an effort to raise margins as the housing market languishes. Home builders in the United States are struggling with weak demand as unemployment hovers around 9 percent and foreclosures drag down prices of previously owned houses.

Revenue in the period, which ended April 30 and was the second quarter of Hovnanian's fiscal year, fell to $255.1 million, from $318.6 million a year earlier. Net orders dropped 17 percent to 1,166 homes.

The loss was Hovnanian's 18th out of the last 19 quarters. Its one profit, in the three months ended January 2010, was the result of a federal tax break.

The company expects narrower losses in the next two quarters, its chief executive, Ara Hovnanian, said in a statement disclosing the results.

''We remain confident that we have the liquidity to weather the remainder of this downturn, and will continue to position ourselves in preparation for the inevitable housing recovery,'' he said.

The report was released after the close of regular market trading. Hovnanian rose 1 cent to $2.34 in New York Stock Exchange composite trading.